Iberdrola, a Spain-based energy company, has made history by issuing its first green bond in Australia. The AU$750 million (approximately €460 million) green debt issuance marks the first green bond issued by a Spanish non-financial company in the “kangaroo” market.
Iberdrola’s strategy of diversifying its sources of financing has made significant progress with this issuance.
Record Demand for Green Bonds
The bond issue was a major success, attracting interest from over 80 long-term investors. The demand for the green bonds was 2.8 times higher than the amount offered. This high demand signals strong investor confidence in Iberdrola’s green financing strategy.
The bond was structured in two tranches: AU$ 350 million (€215 million) for a six-year term and AU$ 400 million (€245 million) for a 10-year term. The coupons were set at 5.38% and 5.87%, respectively. The final cost was very close to what Iberdrola could have obtained in the Euromarket, further emphasizing the success of the transaction.
Funding Renewable Projects in Australia
The proceeds from the green bond will be directed toward funding Iberdrola’s renewable energy projects in Australia. This aligns with the company’s broader Environmental, Social, and Governance (ESG) objectives. The successful bond issue will provide crucial capital for future investments in the country’s renewable energy sector.
Diversifying Financing and Market Expansion
Iberdrola’s recent move into the Australian market strengthens its strategy of diversifying financing sources. The company has also operated in the Swiss and British markets this year, showcasing its global reach. Additionally, Iberdrola has established itself as the only European utility to issue green bonds in multiple markets, reflecting its strong financial positioning.
Strong Investor Interest in ESG Investments
The issuance attracted significant interest from ESG-focused investors, demonstrating Iberdrola’s commitment to sustainable growth. More than 80 investors participated in the transaction, including both Australian and Asian investors. The company’s ability to access diverse financing markets is a testament to its strong credit standing and its leadership in ESG initiatives.
Iberdrola’s green bond issue in Australia highlights its leadership in the renewable energy sector and commitment to sustainability. This transaction not only supports its renewable energy initiatives but also solidifies its role in the global transition toward a sustainable future.